Solar Energy: the future of India’s power sector

Solar power generation projects are attracting foreign investors. The solar energy sector in India has a capacity of 4 GW power generation as of today. The target is to produce 100 GW by 2022 with an investment of $100 billion spread over 7 years. Major investments to the tune of $20 billion for a 20 GW solar power plant were announced recently by India’s telecommunication company Bharti Enterprises, Taiwan’s Foxconn, and Japan’s SoftBank. Other private companies Adani Power, Reliance Power and SunEdison have committed to invest more than $5 billion in the sector. Many reasons are attributed to the interest shown by the private sector to invest in the sector. Energy demand is predicted to increase at a regular rate of 5.2% between the years 2014- 2024. Presently the country requires more than 1,068,923 million units of electricity every year. The supply falls short of demand by 3.6%. Coal power plants and the imported coal cannot meet all the demand for electricity. There has been a constant drop in the price of solar power in the recent times. The solar power panels has become affordable in the recent years and along with the lower financing costs,the solar energy sector has attracted number of investors. A major advantage for solar energy harvesting projects is the availability of wastelands in excess of 467,021 square km in India.

One of the dominant areas of concern for investors is the issue of contentious tariffs. Tariffs have fallen form Rs.15 per unit in 2012 to less than Rs.5 in 2015. At the rate of Rs.5 per solar unit, the internal rate of return (IRR) for investors is expected to be 15%. If the tariff reduces below INR 5 per unit, IRR reduces to around 10%. This situation is unattractive for Indian companies. The cost of solar modules has decreased by 80% in the past few years. The developers in the sector are dependent on a decrease in price of equipment for the growth plans to materialize.

The light-sensitive nanoparticle has the potential to offer less costly and malleable material for fabrication of solar cells. The novel material absolutely function in outdoors and has feasible utilization for the solar energy market. The colloidal quantum dots maintain their stability outdoors since they do not bind to air. This helps in an increased absorption of radiant light. Solar panels built using this novel technology were eight percent more efficient in converting sunlight into electricity.

A solar Photo Voltaic array consist of number of solar cells. The solar cell has an efficiency of 15%. This implies 85% of sunlight falling on the solar cell is not converted into current and is wasted. The investments in solar industry should focus on research and development of solar cells with higher efficiency.